Lafarge: Results as of September 30, 2013

  Lafarge:Results as of September 30, 2013

                        Q3 EBITDA UP 4% LIKE FOR LIKE




Business Wire

PARIS -- November 6, 2013

Regulatory News:

Lafarge (Paris:LG):


  *Sales down 4% to €4,236m,      *Current operating income down 7% to
    up 4% like for like              €755m,
  *EBITDA down 6% to €1,007m,      up 5% like for like
    up 4% like for like            *Net result Group share stable at €304m
                                     (€1.06 per share)


  *Sales down 4% to €11,484m,      *Current operating income down 15% to
    stable like for like              €1,546m,
  *EBITDA down 10% to €2,309m,      -5% like for like
    -3% like for like               *Net result group share up 38% to €388m
                                      (€1.35 per share)

(1) like for like variations are calculated excluding the impact of scope and
exchange rates


  *Volume trends improved month after month in the third quarter, sustained
    by ongoing growth in most emerging markets, the recovery in the United
    States and Europe stabilizing at a low level. On the other hand, the third
    quarter was marked by adverse exchange rates which had a negative impact
    of 7% on both sales and EBITDA (respectively €-286 million and €-67
    million in the quarter).
  *Q3 EBITDA grew 4% at constant scope and exchange rates, benefiting notably
    from a solid performance in North America, Middle East / Africa and Asia.
    EBITDA margins improved 50 basis points on a like for like basis and
    excluding CO[2,] supported by higher volumes, firm prices and the
    acceleration of cost reductions and innovation measures which generated
    respectively €130 million and €80 million additional EBITDA in the
    quarter. In the first nine months, these measures have generated a total
    of €470 million (€290 million from cost reductions and €180 million from
    innovation measures), and the Group is on track with its plan.
  *Net debt at the end of September, at €10.9 billion, was reduced by €1.3
    billion compared to end of September last year and by €0.9 billion in the
    quarter, notably thanks to divestments made at attractive multiples.
  *The Group confirms its objective to deliver its 2012-2015 plan by the end
    of 2014, with at least €600 million of EBITDA coming from cost reduction
    and innovation measures in 2014.
  *It announces new objectives beyond 2014 and plans to generate at least
    €1.1billion of additional EBITDA from its actions in 2015-2016, of which
    €600 million from cost reductions and €500 million from innovation. This
    represents a minimum objective of €550 million per annum.


“With improving volume trends and despite the adverse effect of exchange
rates, we continued to progress in the third quarter on our strategic action
plan. We have reduced net debt by more than one billion euros compared to
September last year, and our cost reduction and innovation actions delivered
results in line with our 2013 objectives. We have accelerated and will
complete our 2012-2015 cost reduction and innovation plan one year ahead of
our initial objective. Building on this momentum, we today announce new cost
reduction and innovation targets for 2015-2016, targeting at least €1.1
billion of incremental EBITDA over that period.

Combined with the utmost discipline in terms of capital allocation, our
measures will drive the strengthening of our financial structure so as to
return to an investment grade status as soon as possible, reducing net debt
below €10 billion in 2013 and below €9 billion in 2014.

Looking ahead, we will benefit from three organic growth drivers: continuing
growth in emerging countries, accelerating growth through innovation and
progressive recovery in mature markets. We will capture this potential thanks
to our high-quality and well spread portfolio of assets and to our competitive
edge in innovation which ensures the development of a value-added offer of
products and services to address the evolving needs of our customers. All our
measures strive towards growth in sales, cash flows and returns and our
priority is to create sustainable value for our shareholders.”


Overall, Lafarge sees cement growth in its markets of between 0 to 3 percent
in 2013 versus 2012. This implies better trends in H2 compared to H1 as market
recovery is becoming evident in the United States, growth in most emerging
markets continues and Europe is showing stabilization at a low level.

Higher pricing is expected for the year. Cost inflation continues, although at
a lower rate than in 2012, benefiting from positive trends in coal and petcoke
prices and reduced general inflation in developed countries.

The Group targets to deliver additional EBITDA of €650 million in 2013 through
its cost reduction and innovation measures.

As stated, the objective is to reduce net debt to below €10 billion in 2013,
and below €9 billion in 2014.


The Board of Directors of Lafarge, chaired by Bruno Lafont, met on November 5,
2013 and approved the accounts for the period ended September 30, 2013.
Further to their limited review of the interim condensed consolidated
financial statements of Lafarge, the auditors have established a report, which
is included in the interim financial report.

           Third Quarter                           Nine Months
                             Variation                              Variation
             2013    2012^(3)   Gross   Like for     2013     2012^(3)   Gross    Like for
                                         like^(4)                                   like^(4)
(million     36.7    36.6       -        3%           101.9    106.3      -4%       -2%
Aggregates   59.8    57.0       5%       5%           143.6    141.2      2%        -
Concrete     8.2     8.3        -1%      1%           23.2     24.0       -3%       -1%
Sales        4,236   4,393      -4%      4%           11,484   12,007     -4%       -
EBITDA^(1)   1,007   1,066      -6%      4%           2,309    2,579      -10%      -3%
EBITDA       23.8%   24.3%      -50bps   +50bps^(5)   20.1%    21.5%      -140bps   -20bps^(5)
margin (%)
Operating    755     810        -7%      5%           1,546    1,822      -15%      -5%
Net income
Group        304     303        -                     388      282        38%
per share    1.06    1.05       1%                    1.35     0.98       38%
Free cash    492     523        -6%                   360      211        71%
Net debt                                              10,944   12,202     -10%

^(1) EBITDA is defined as the current operating income before depreciation and
amortization on tangible and intangible assets and free cash flow is the net
cash generated or used in continuing operating activities less sustaining
capital expenditures. They are both non-GAAP financial measures.

^(2) Basic average number of shares outstanding of 287.3 million and 287.1
million for third quarter 2013 and 2012, and of 287.2 and 287.1 for the first
nine months of 2013 and 2012 respectively.

^(3) 2012 figures have been restated further to the application of IAS19R.

^(4) At constant scope and exchange rates.

^(5)Margins like-for-like are calculated excluding the carbon credit sales and
at constant scope and exchange rates.


(€m)            Third Quarter                   Nine Months
                              Variation                     Variation
                                        Like                            Like
               2013    2012            for     2013    2012            for
                                Gross  like                    Gross 
                                        ^(1)                            like
North America   288     270     7%      23%     417     398     5%      21%
Western         110     146     -25%    -26%    260     401     -35%    -33%
Central and
Eastern         106     127     -17%    -16%    151     214     -29%    -29%
Middle East     306     301     2%      11%     856     947     -10%    -3%
and Africa
Latin America   63      82      -23%    -6%     185     211     -12%    -2%
Asia            134     140     -4%     8%      440     408     8%      14%
TOTAL           1,007   1,066   -6%     4%      2,309   2,579   -10%    -3%

^(*) EBITDA is defined as the current operating income before depreciation and
amortization on tangible and intangible assets and is a non-GAAP financial

^(1) At constant scope and exchange rates.


Volumes improved in the third quarter, supported by continuing growth in most
of the Group’s emerging markets, as well as volume catch up in the United
States as the recovery materializes after a first-half affected by adverse
weather in our regions.

Consolidated sales decreased 4% in the third quarter affected by adverse
foreign exchange. At constant scope and exchange rates they grew 4%, supported
by higher volumes and improved prices across all product lines to address cost

EBITDA was also impacted by adverse exchange rates, notably in Brazil, India,
South Africa and Canada. At constant scope and exchange rates, Q3 EBITDA
increased 4%. Cost reduction and innovation actions more than offset cost
inflation, an adverse €28 million impact of the reduction of our inventories
in the quarter and the absence of carbon credit sales in Q3 2013 (vs. CO[2]
proceeds of €23 million in Q3 2012). Cement prices were sequentially stable
from Q2 to Q3 2013 and are up 2% year on year in the first nine months. The
Group continued to actively increase prices although the impact on EBITDA was
limited by price adjustments in a limited number of countries and adverse mix

Net income Group Share in the quarter, at €304 million remained stable
compared to Q3 2012, despite the negative impact of foreign exchange on EBITDA
and the absence of CO[2] sales.

Net debt now stands at €10.9 billion, a drop by €1.3 billion relative to the
end of September last year. Compared to year-end 2012, it decreased €0.4
billion despite the usual impact of seasonality. This reflects strict capex
discipline and divestments but also a solid improvement of working capital
performance, notably thanks to a reduction in inventories. Compared to the end
of September 2012, the working capital when expressed as a number of days of
sales has been reduced by 6 days, bringing it to a historical low at this
point in the year.


In the quarter Lafarge received €0.9 billion from divestments, notably from
the sale of its gypsum operations in the US (€0.5 billion) and its cement
operations in Ukraine (€0.1 billion) made at attractive multiples. Divestments
also include €0.2 billion received from our new partner in India to contribute
to the Group’s development in this country. Since the beginning of the year,
cash from divestments reached €1.0 billion. With the most recent divestments
announced, the Group has secured €1.7 billion^1 of divestments since January
1^st 2012 and it shall continue to pursue further value creative divestments.

Investments totaled €237 million for the quarter.

  *Sustaining capital expenditures amounted to €94 million.
  *Development investments amounted to €143 million in the third quarter of
    2013. It included investments in the plants of Exshaw (Western Canada) and
    Ravena (New York, United States) and in the new cement plant projects in
    Kaluga (Russia) and Rajasthan (India).

Our plant in Rajasthan (2.6 million tonnes) was recently commissioned and has
started its operations in October. Reaping the benefits of our debottlenecking
investments, we are starting additional capacities in the Philippines, Brazil
(Rio) and Algeria (total of 1.8 million tonnes) which are progressively
ramping up and support volume growth in these countries.

Going forward, the Group plans to continue to seize growth opportunities for
its uniquely diversified portfolio, selectively investing in its core markets.



The analyst presentation of results and the interim financial report,
including the interim management report and the condensed consolidated
financial statements are available on the Lafarge Website:

Practical information:
There will be an analyst conference call at 9:00 CET, on November 6, 2013. The
presentation will be made in English with slides that can be downloaded from
the Lafarge website (

The presentation may be followed via an audiocast on the Lafarge website as
well as via teleconference:
- Dial in (France): +33(0)1 76 77 22 22
- Dial in (UK or International): +44(0)20 3427 1904
- Dial in (US): +1212 444 0481

Please note that in addition to the web cast replay, a conference call
playback will be available until November 13, 2013 midnight at the following
- France playback number: +33 (0)1 74 20 28 00 (pin code: 9397705#)
- UK or International playback number: +44 (0)20 3427 0598 (pin code:
- US playback number: +1347366 9565 (pin code: 9397705#)

Lafarge’s next financial publication – 2013 Full Year results – will be on
February 19, 2014 (before the NYSE Euronext Paris stock market opens).


A world leader in building materials, Lafarge employs 65,000 people in 64
countries, and posted sales of €15.8 billion in 2012. As a top-ranking player
in its Cement, Aggregates and Concrete businesses, it contributes to the
construction of cities around the world, through its innovative solutions
providing them with more housing and making them more compact, more durable,
more beautiful, and better connected. With the world’s leading building
materials research facility, Lafarge places innovation at the heart of its
priorities in order to contribute to more sustainable construction and to
better serve architectural creativity. Since 2010, the Lafarge Group has been
part of the Dow Jones Sustainability World Index, the first global
sustainability benchmark in recognition of its sustainable development
actions. More information is available on Lafarge's website:

Important disclaimer - forward-looking statements:

This document contains forward-looking statements. Such forward-looking
statements do not constitute forecasts regarding results or any other
performance indicator, but rather trends or targets, as the case may be,
including with respect to plans, initiatives, events, products, solutions and
services, their development and potential. Although Lafarge believes that the
expectations reflected in such forward-looking statements are based on
reasonable assumptions as at the time of publishing this document, investors
are cautioned that these statements are not guarantees of future performance.
Actual results may differ materially from the forward-looking statements as a
result of a number of risks and uncertainties, many of which are difficult to
predict and generally beyond the control of Lafarge, including but not limited
to the risks described in the Lafarge’s annual report available on its
Internet website ( and uncertainties related to the market
conditions and the implementation of our plans. Accordingly, we caution you
against relying on forward looking statements. Lafarge does not undertake to
provide updates of these forward-looking statements.

More comprehensive information about Lafarge may be obtained on its Internet
website (, including under “Regulated Information” section.

This document does not constitute an offer to sell, or a solicitation of an
offer to buy Lafarge shares.

^1 Excluding €0.2bn capital injection of our new partner in India, completed
in Q3 2013.


Press Relations
Christel des Royeries, +33 (0)1 44 34 19 47
Sabine Wacquez, +33 (0)1 44 34 96 83
Anne Plaisance, +33 (0)1 44 34 18 18
Investor Relations
Stéphanie Billet, +33 (0)1 44 34 93 71
Michael Bennett, +33 (0)1 44 34 11 51
Laurence Le Gouguec, +33 (0)1 44 34 94 59
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